Understanding regional, income and demographic differences 

19 January, 2023

Regional demand 

South India dominates Indian gold jewellery consumption, accounting for 40% of the country’s total jewellery demand. 1 There has been little change in the regional share of gold demand over the past few decades. Southern demand remains high due to consumers’ affinity for plain gold jewellery, high per capita incomes and low poverty levels. Those living in states like Kerala have high incomes due to large financial inflows from the Gulf, especially from Keralites who are settled there. Tamil Nadu, meanwhile, is India's IT and manufacturing hub. The notion of high gold consumption in South India was also supported by a TNS consumer research study in 2016. This revealed that Southern India had the highest gold ownership rates (76% of the respondents said they owned gold jewellery) and the highest rate of purchases in the past 12 months (60% of the respondents had purchased gold jewellery within that timescale).

While the South dominates the landscape, changes have emerged within the region. In particular, gold demand in Andhra Pradesh and Telangana has superseded other Southern states due to the inflow of investment since the state of Andhra Pradesh was sub-divided and Telangana was created. A robust policy framework and a good response mechanism have helped encourage investment in these two states. On the other hand, demand in Kerala has been negatively impacted due to the slowdown in the Gulf during COVID.  

Southern India’s gold market is dominated by plain 22-carat gold jewellery, although demand for 18-carat diamond pieces has increased in recent years driven by younger consumers who are more open to buying diamond-set products. North and West India enjoy 20%2  and 25%3  of market share, respectively. In contrast, Eastern India has a market share of just 15% (Table 5). The Northern and Western markets are quite diverse, with a preference for 23-, 22-, 18- and 14-carat items. Unlike the South and West, the Eastern part of the country remains economically underdeveloped due to a lack of connectivity and difficult terrain. However, during the last few years the government has focused on developing the Northeast, a policy that will likely result in a rise of market share in this region.


Table 5: Regional tastes in gold jewellery

  South East West North
Market Share 40% 15% 25% 20%
Caratage 22ct 22ct 22ct, 18ct, 14ct 23ct, 22ct, 18ct, 14ct
Important Centres Chennai, Hyderabad, Cochin, Bangalore Kolkata Mumbai, Ahmedabad New Delhi, Jaipur

Source: Metals Focus, World Gold Council

Rural India is the largest consumer of gold jewellery 

Despite urbanisation and migration to urban cities, two-thirds of India’s population are rural-dwellers. 4 But this figure is falling. In the last decade alone, the number of people living in rural India has dropped from 69% to 65%, which loosely translates into nearly 50m people migrating to urban areas. 5

For decades, gold has been the focal point for investment across many rural communities, in part due to a lack of awareness and penetration of banking products and services. Over the last decade, however, successive governments have focused on financial inclusion and banking services have become more widespread in rural areas. Nevertheless, despite this better access to bank accounts, gold remains the main investment choice and rural India’s gold demand has only dropped by a few percentage points over the last few years – from 60% to the current 55-58%. 6 On the one hand, rapid urbanisation and erratic monsoons have impacted demand in rural India, but on the other, urbanisation in small towns has led to inward investment and rising land prices, which in turn has led to rising incomes. 

The middle class is the primary gold consumer 

Many international companies regard India as a key strategic market. At the heart of their ambitions is the Indian middle class, which has expanded from 150m in 2010 to an estimated 350m in 2021. 7 Given India's economic trajectory and young demographic this number will likely rise going forward. Considering the size of the middle class in India it is not a surprise that 50% of gold demand originates here.8 This is backed by the IGPC-IIMA household survey, which concluded that in 2020 about 51% of gold demand stemmed from consumers with incomes between Rs.200,000 and Rs.1,000,000 per annum. For those with incomes above Rs.1,000,000 the share was just 19%. On the other hand, consumers with an income below Rs.200,000 were responsible for 30% of gold demand. Consumers with an income above Rs.1,000,000 hold a large proportion of their investment in equity markets and real estate (Chart 2). Another interesting insight from the same survey was that over half of the middle class owned gold. In contrast, the percentage for higher income groups was just 17%, while about 32% of low-income households owned gold. 

The younger generation is driving changes in the Indian gold jewellery market

Over the last few years retailers have focused increasingly on the millennial population aged between 25 and 40 whose buying behaviour differs from their elders. Our 2019 research, carried out by Hall & Partners, found that around one-third of 18-24 year olds had bought gold jewellery in the 12 months prior to the survey; this percentage increased to 44% for 25-34 year olds. 9 Although 18-24 year olds  believed that gold would hold its value in the long term, this was not enough to convince them of its desirability. In particular, young women in urban India had a much weaker emotional connection to gold jewellery than their elders.

Shifts in the buying behaviour and preference of millennials is instigating changes in the jewellery industry. Metals Focus’ interactions with various retailers over the last few years have revealed a strong demand for lightweight jewellery, especially in the daily wear segment. For example, today one can easily buy a chain or Mangalsutra in a weight of 5-8g, which would have been impossible five years ago. Furthermore, young consumers are looking at modern designs that can be paired with Western clothing. An increasing number of manufacturers and designers are becoming mindful of these needs and are creating product lines specifically for this audience. One case in point is Mia, an independent jewellery store floated by Tanishq, which focuses on lightweight, modern jewellery for the young woman. Another important change is the growth of diamond jewellery  in the more traditional pockets of Southern India.

Silver and platinum jewellery do not pose a significant threat      

Over the last decade there has been a steady increase in demand for silver and platinum jewellery, driven by the rising gold price as well as changes in consumer behaviour and product innovation. For instance, gold-plated silver jewellery has emerged as one of the fastest growing segments in recent years. As a result, silver jewellery fabrication has increased from 700t in 2010 to 1,800t in 2021. 10  Meanwhile, platinum jewellery demand has risen from 0.8t in 2010 to 3.9t in 2021. 11  This has led to a debate across the trade as to whether the growth in silver and platinum jewellery is hurting the gold market. 

While silver and platinum jewellery have made inroads, they have yet to pose a significant threat to gold jewellery consumption. Most silver jewellery in India consists of traditional pieces, such as anklet, toe and nose rings. The only silver segment that overlaps with gold is gold-plated silver jewellery and modern daily wear, in particular sterling silver pieces that are attractive to the younger consumer. The growth in the silver jewellery segment has largely been a function of the rising gold price; most modern silver jewellery features rose or yellow gold-plating, which suggests that it is being promoted as a low-cost alternative to gold for daily and occasion wear. 

Over the last five years, traditional designs, such as temple and bridal jewellery, have also been made in gold-plated silver. Given the fact that many large independent and chain stores are now offering this jewellery in the silver section of their displays, this may have the potential to cannibalise gold jewellery sales. Gold-plated silver jewellery closely resembles real gold jewellery, especially as manufacturers are improving both design and finish of these items. We believe, however, that this is unlikely to emerge as an outright competitor to gold jewellery; it is more probable that it will gain only a small percentage of gold jewellery sales in the daily and occasion wear market, particularly if gold prices continue to outpace silver.

In terms of platinum, while this is a fast-growing market, in absolute terms it is extremely small. A consumer who buys platinum rarely does so as an alternative to gold. Platinum jewellery does, however, compete with gold in certain areas: most notable are products for men, such as bracelets, chains and love bands, which make up the fastest growth segment. It is also worth noting that platinum sales are driven by the younger generation, especially the middle and upper-middle classes, as it has always been marketed as a premium product aimed at evolved and aspirational consumers rather than targeted towards a mass market. However, Metals Focus believes that there is little understanding of platinum jewellery outside the young urban demographic and so gold comfortably retains its standing as the most popular aspirational purchase. 


Chart 2: The middle class is the primary gold consumer in India

India Jewellery Demand: Chart 2

Sources: Metals Focus, World Gold Council; Disclaimer


  1. Metals Focus 
  2. Metals Focus
  3. Metals Focus
  4. World Bank 
  5. World Bank
  6. Metals Focus 
  7. Pew Research Center
  8. India’s gold market: evolution and innovation  
  9. Gold retail market insights 
  10. Metals Focus
  11. Metals Focus